Any broker who wants your money in a live account will offer you a demo account; it’s the ‘norm’. But is demo trading; and are demo accounts, really required? The answer is a resounding yes. The broker will entice you in with the ability to open a trading account with a very small amount of money; they will offer you lots of leverage. Alarm bells should be ringing in your head at this point – if it was this easy to make money, why isn’t everybody a millionaire?
A demo account and demo practice is necessary for long term success as a trader and there are many advantages to beginning your Forex training on a demo account. Try not to be enticed to the action and excitement of trading real money because as a new trader, you lack the skills required. A demo account will give you the chance to get used to the trading platform and to make silly mistakes. “Whoops I just bought instead of sold” – at least that mistake didn’t cost you anything. “So, that’s how position sizing works”, “Right, now I understand leverage” -those mistakes will blow up your first live account quicker than you could possible believe. Keep your Forex training simple and learn Forex trading the way it will help you the most.
Ultimately, the best way to get the most from your demo trading and demo account is to treat it as real. Admittedly, it doesn’t have the same emotional requirements as live trading, nor the euphoria and excitement. However, it does have the ability to teach you the mechanics and techniques of trading and the chance to create and test a trading strategy, for free.
When you first start to learn Forex trading with your demo account keep a log of all of your trades as you would if it was real. Follow your Forex training strategy entry and exit rules (test that it works). Try to remain as focused and “true to life” as you would if it was real. Otherwise, there is little point in the exercise. Imagine your progress as a trader in stages – your first stage is demo trading. In order to progress to live trading you have to get to stage two. Now set yourself a target in order to get to stage two. It could be based on time such as aiming to go live within 6 months. It could be based on profit, such as aiming to go live once you grow the Forex training demo account by 10%. It could be based on statistics such as aiming to go live once you have done 100 trades with a greater than 55% win rate. It doesn’t really matter too much how you decide. Just make sure you know that you have a vastly greater chance of longer term success if you spend time practicing on a demo account if you decide to learn Forex trading.
If you want to Forex learn trading you will need to practice on a demo account. Our Forex training course will provide you with a demo account as soon as you start.
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